Tyco cuts internal PR staff out of loop as RLM steps in

October 21, 2002
by PAUL CORDASCO

NEW YORK: Tyco's board of directors has removed the bulk of communications responsibility from its designated PR staff. The company has been besieged by scandals resulting from allegations of insider dealing under former CEO Dennis Kozlowski.

NEW YORK: Tyco's board of directors has removed the bulk of communications responsibility from its designated PR staff. The company has been besieged by scandals resulting from allegations of insider dealing under former CEO Dennis Kozlowski.

Instead, day-to-day communications have been handed to PR agency Robinson Lerer & Montgomery (RLM), according to sources familiar with the situation.

RLM did not return PRWeek's calls for comment.

Tyco's chief strategy officer, Brad McGee, who had been running corporate communications and was serving as chief spokesperson, is no longer involved in communications efforts. McGee was a top aide to Kozlowski, and has been named as one of several executives who received unauthorized compensation during the Kozlowski regime.

McGee received $1.94 million in forgiven loans from Tyco, according to an SEC filing the company made in September. The filing also stated there is no evidence to suggest that McGee knew these payments were unauthorized.

He is now working in the company's finance group.

Another key executive, chief communications officer Maryanne Kane, is no longer with Tyco. VP of communications Peter Ferris has assumed her responsibilities, which include regional communications.

Tyco, a Bermuda-based conglomerate offering a wide array of products and services, would not comment on personnel moves, and said it does not comment on its outside PR counsel.

RLM was hired two days after Kozlowski was indicted on charges of tax evasion, and has since assumed nearly total control of the firm's media relations function. RLM is working closely with the board of directors as it wades through negative media attention and as revelations and allegations of self-dealing under Kozlowski continue to emerge.

During Kozlowski's tenure, Kekst & Co. had been the firm's agency of record. Kekst said it resigned the Tyco account three days after Kozlowski's indictment due to unspecified "conflicts of interest."

At the time of Kozlowski's indictment, Tyco was also retaining Brunswick for crisis counsel. Brunswick was hired in early 2002 to help the company regain its footing after a proposal by Kozlowski to split Tyco into four companies was received coolly by Wall Street. The plan proved to be just one in a series of PR gaffes that Tyco endured during the months preceding Kozlowski's indictment in June.

Tyco and Brunswick severed ties about the time of the Kozlowski indictment.

Brunswick would not comment on the status of the Tyco account.

Tyco's communications upheaval appears to be an example of how the bear market and recent corporate scandals can quickly alter a company's PR apparatus. Indeed, if a crisis or transition forces a change in senior management, the strategic PR team often seems to follow.

"When there's a management change, the new team can find a sense of comfort by surrounding themselves with people they know and trust," said a source familiar with Tyco's communications changes. "I think people realize that's the way it is in this business, and there's no point in fighting that."